Executive Briefings

The Human Element in Supply Chain Sustainability

So much of the attention focused on supply chain sustainability has to do with energy conservation, regulatory compliance and the like, says Todd Stark, chief operating officer of Fair Trade USA. But companies and consumers shouldn't forget that the workers upstream need to have fair wages and safe and clean working environments.

Fair Trade USA, a non-profit, offers a market-based or trade-based model of sustainable development and community empowerment, Stark says. It works largely in the CPG vertical with large and small companies interested in seeing that their products are certified according to rigorous social and economic - as well as environmental - criteria of sustainability.

Those types of sustainability must be maintained throughout the supply chain, Stark says. The coffee bean business, the second-most traded commodity in the world after oil, illustrates what that means. From the point of taking those beans, which can be grown in 35 to 40 countries, and harvesting and exporting/importing them requires careful management each step of the way. "It's a process that involves people all throughout the supply chain, and our job is make sure that it's done in a way that meets our rigorous criteria."

Sustainability has become the cost of doing business. But so often  when the term is thrown around, things like environmental standards, compliance, codes of conduct, basic stewardship of land - "all very important things" - come to mind. But what about the human element, Stark asks?

"It's very easy to say, I'm going to make sure my production operation roasting beans in the U.S. meets my basic criteria for sustainability. But what about people who produce that coffee? We don't think about that. Who really thinks about what kinds of sustainability issues impacted the people who produced the coffee?

Our job is to help bring the human element of empowerment of individual farmers and workers, empowerment of their communities, to the sustainability effort."

Stark says there doesn't have to be "tension" between corporate heads and producers, be they of coffee beans, computers or what have you. "A few years back people in the sustainability world and people in the corporate world used to think that the twain could never meet. We used to think that if I'm going to spend money on sustainability in my supply chain, that's automatically coming out of my bottom line, hurting my shareholder value, so I can't do any work in that area."

The reality, he says, is connecting the market with the producer upstream is the most powerful lever for change. For example, the great concern of many people is the cost in the supply chain driven by a lack of reliability of product availability.

"We work in commodities like cocoa, honey, coffee, sugar, tea, flowers and fruits - commodities that are very volatile. Part of our work is to try to reduce the variability of supply, increase the predictability of supply upstream. That translates directly into shareholder value because it reduces many of those variational costs in the supply chain."

To view video in its entirety, click here


Keywords: HR & Labor Management, Environmental, Supply Chain Analysis & Consulting, Global Supply Chain Management, Sustainable Development, Community Empowerment

Fair Trade USA, a non-profit, offers a market-based or trade-based model of sustainable development and community empowerment, Stark says. It works largely in the CPG vertical with large and small companies interested in seeing that their products are certified according to rigorous social and economic - as well as environmental - criteria of sustainability.

Those types of sustainability must be maintained throughout the supply chain, Stark says. The coffee bean business, the second-most traded commodity in the world after oil, illustrates what that means. From the point of taking those beans, which can be grown in 35 to 40 countries, and harvesting and exporting/importing them requires careful management each step of the way. "It's a process that involves people all throughout the supply chain, and our job is make sure that it's done in a way that meets our rigorous criteria."

Sustainability has become the cost of doing business. But so often  when the term is thrown around, things like environmental standards, compliance, codes of conduct, basic stewardship of land - "all very important things" - come to mind. But what about the human element, Stark asks?

"It's very easy to say, I'm going to make sure my production operation roasting beans in the U.S. meets my basic criteria for sustainability. But what about people who produce that coffee? We don't think about that. Who really thinks about what kinds of sustainability issues impacted the people who produced the coffee?

Our job is to help bring the human element of empowerment of individual farmers and workers, empowerment of their communities, to the sustainability effort."

Stark says there doesn't have to be "tension" between corporate heads and producers, be they of coffee beans, computers or what have you. "A few years back people in the sustainability world and people in the corporate world used to think that the twain could never meet. We used to think that if I'm going to spend money on sustainability in my supply chain, that's automatically coming out of my bottom line, hurting my shareholder value, so I can't do any work in that area."

The reality, he says, is connecting the market with the producer upstream is the most powerful lever for change. For example, the great concern of many people is the cost in the supply chain driven by a lack of reliability of product availability.

"We work in commodities like cocoa, honey, coffee, sugar, tea, flowers and fruits - commodities that are very volatile. Part of our work is to try to reduce the variability of supply, increase the predictability of supply upstream. That translates directly into shareholder value because it reduces many of those variational costs in the supply chain."

To view video in its entirety, click here


Keywords: HR & Labor Management, Environmental, Supply Chain Analysis & Consulting, Global Supply Chain Management, Sustainable Development, Community Empowerment